Prepaid phone plans are still the best. Even though it’s been a long time since I first posted on this, prepaid is still the way to go — and there are some new prepaid plans that are even better. Here are the top two:

Untitled

  1. Project Fi. I have been testing this plan and it’s working great for me. Under this plan, you pay $20 a month for unlimited talk and text, and then $10 per GB for the data you use. I usually use about .5 GB in a month, so my bill is $25 plus tax. Better yet, the phone is built to seek out Wi-Fi networks to get you free data when possible. When you’re out of Wi-Fi range, the phone looks for coverage from Sprint, T-Mobile and U.S. Cellular — and picks the best. Critics complain that only a few phones are Project Fi compliant — but to me it’s worth it to get one of those phones (Nexus 5X for me, a great phone for $199).
  2. Republic Wireless. A family member is testing this for me, and he reports great results. With rates similar to Project Fi, a tendency to use free Wi-Fi when it’s available, and the Sprint network otherwise, it’s a worthy competitor.
  3. Total Wireless. My Project Fi coverage is great — but, let’s face it, Verizon still has the best national network. If you want access to that network with a prepaid plan, check out Walmart’s Total Wireless. You don’t get the best selection of phones, but you do get that Verizon network and you’ll still save a lot over conventional Verizon service.

Important note: If you are taken in by a phone that’s “free” but costs you every month in higher charges, you probably won’t like a prepaid plan. In prepaid plans, you pay a real up-front price for the phone and then save every month. A “free” phone can end up being quite expensive!

I’m not sure why conventional (“postpaid”) wireless is such a bad deal. In the U.S., by historical accident, prepaid became the less prestigious option (think “burner” phones used by bad guys). But prepaid is the norm in other parts of the world and it’s the best deal in the U.S.


Here’s my earlier post on prepaid phones:

If you’re a heavy wireless phone user and you use lots of voice minutes, this idea isn’t for you. But if you want excellent phone service for hundreds of dollars less per year than you’re currently paying, consider prepaid wireless. The major carriers all have prepaid plans, so you get a good network — just with different payment plans.

Here’s how it works for me: I buy a new, unlocked Nexus device (currently a Nexus 5) and add Tmobile prepaid service. I currently pay $30 per month and get unlimited Internet and text plus 100 minutes of voice (Do you use more? Many of us don’t.). You can cut that down to around $25 by buying discounted Tmobile prepaid cards on eBay.

Add it up — your “free” phone from a major carrier may cost you a lot. Here’s a post with more on this general subject: http://plainmoney.com/2015/06/why-prepaid-is-still-best/.

(The implied question: You’re a full professor at a university — don’t you make enough money to pick any phone and plan you want? And the answer: Yes, but in connection with my work I test products intended for low-income adults. Prepaid wireless is one such product. The American Express Bluebird card is another. When I’m counseling people financially, I try to not recommend products I don’t use. Trust me on this — many products supposedly targeted to “the low end” are quite good.)